Oil and gas raise: what investors and reserve lenders read
An oil and gas raise is underwritten on reserves, so the reserve report and the data behind it lead the room. Equity investors and reserve-based lenders also read leases and title, production history, operating costs, hedges and environmental records.
- 5 yearsUsual limit for scheduling undeveloped locations as proved under SEC rules, 17 CFR 210.4-10(a)(31)
- 90%Probability threshold for proved reserves under probabilistic methods, 17 CFR 210.4-10(a)(24)
Folder index
- 01 Summary Assets, production, reserves summary, capital request and use of proceeds.
- 02 Reserve reports Third-party reserve report, prior reports, price deck, type curves.
- 03 Production Monthly production by well, decline curves, downtime.
- 04 Leases and title Lease schedule, title opinions, division orders, net revenue interest and working interest by well.
- 05 Operations Lease operating expenses, drilling and completion costs, AFEs, operator agreements.
- 06 Marketing Gathering, processing and transportation contracts, realized prices.
- 07 Hedges Hedge book, ISDA agreements, counterparty list.
How this raise works
Producers and drilling programs raise capital from private equity, family offices, individual investors in drilling partnerships, mineral and royalty funds and banks or private credit lenders offering reserve-based loans. Interests sold to passive investors, including many working interest programs, are commonly treated as securities and sold under Regulation D.
Reserve reports follow categories that investors know: proved developed producing, proved developed non-producing and proved undeveloped, with probable and possible beyond. SEC rules for reporting companies define proved reserves by reasonable certainty, use a 12-month average of first-day-of-the-month prices and limit undeveloped locations to those scheduled for drilling within five years absent specific circumstances. Private deals often also show a price deck case.
Reserve-based lenders set a borrowing base from the reserve report, commonly redetermined twice a year, and require hedges and title on a large share of the collateral. Equity investors read the same report but focus on undeveloped upside, drilling costs and the operator's record.
Best data rooms for this raise
The 16 rooms re-ranked with this raise's weights. Raise workflow carries the most weight here.
- Investor tracking 22%
- Permission control 21%
- Raise workflow 25%
- Investor onboarding 14%
- Cost of a raise 18%
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Folder index for the room
A starting index for this raise. Number the folders so the order survives exports and investors can cite them in questions.
- 01 SummaryAssets, production, reserves summary, capital request and use of proceeds.
- 02 Reserve reportsThird-party reserve report, prior reports, price deck, type curves.
- 03 ProductionMonthly production by well, decline curves, downtime.
- 04 Leases and titleLease schedule, title opinions, division orders, net revenue interest and working interest by well.
- 05 OperationsLease operating expenses, drilling and completion costs, AFEs, operator agreements.
- 06 MarketingGathering, processing and transportation contracts, realized prices.
- 07 HedgesHedge book, ISDA agreements, counterparty list.
- 08 Environmental and regulatoryPermits, spill history, plugging liabilities, regulatory filings.
- 09 FinancialsFinancial statements, debt, capital budget.
- 10 Offering or loan documentsPPM or term sheet, subscription documents, credit agreement drafts.
- 11 Q&AQuestions from engineers, landmen and investors.
Features this raise needs
| Feature | Why | Ellty | iDeals | Datasite | Ansarada | Intralinks | SecureDocs |
|---|---|---|---|---|---|---|---|
| Q&A module | LPs and lead investors post questions on a file; the deal team routes each one, drafts a reply and decides who sees it. | ||||||
| Drag-and-drop folders | An entire numbered folder tree goes up in a single drop, structure intact. | ||||||
| Investor activity log | A per-investor record of opens, pages and minutes, which tells the IR team who is in diligence and who stalled. | ||||||
| Dynamic watermarks | Stamps the reader and a timestamp over every page, so a PPM that leaks carries its source with it. |
Setting up the room
- 01
Lead with the reserve report
Put the current third-party report and the data files behind it in the first folders investors open.
- 02
Reconcile interests
Make the working and net revenue interests in the lease schedule match the reserve report and division orders.
- 03
Upload well data in bulk
Production and well files are large. Load them by field and well with a clear naming scheme.
- 04
Show liabilities
Disclose plugging and abandonment estimates and environmental history in their own folder.
- 05
Track engineer questions
Investor engineers ask detailed questions on type curves and costs. Log answers so the reserve engineer can review them.
Common mistakes
- Interests in the lease schedule that differ from the reserve report.
- Presenting a price deck case without the SEC-style case beside it.
- Leaving plugging and abandonment liabilities out of the summary.
- Undeveloped locations with no drilling schedule or capital plan.
Calculators for this raise
Or take the four-question quiz and check the raise checklist.
Questions and answers
Are drilling program interests securities?
Interests sold to passive investors commonly are, and sponsors usually rely on Regulation D. Ask securities counsel about your structure.
What is a borrowing base?
The amount a reserve-based lender will lend against the value of proved reserves, reset at scheduled redeterminations.
Who reads the technical folders?
Petroleum engineers and geologists for the investor or lender, landmen for title, and environmental consultants.